Why Impulse MACD is 10 Times Better Than Traditional MACD

Impulse MACD vs. Traditional MACD: Which One Should You Use?

MACD is probably one of the most popular technical indicators out there. There are dozens of trading strategies that utilize this tool, and to be honest, some of them are quite successful. But what if I told you that there is an indicator on TradingView that is 10 times better than the old MACD? It works very well for trading Forex, stocks, and cryptocurrencies and it perfectly filters out a range market. This indicator is called the Impulse MACD. In this article, you will learn how to use it in your trading to find next-level trade entries.

Understanding Traditional MACD

Before we add the Impulse MACD to the chart, let’s first understand how a regular old-school MACD functions. MACD stands for Moving Average Convergence Divergence. This indicator is a momentum oscillator. It measures both the speed as well as the rise or fall of a stock’s price. Essentially, it calculates the difference between an instrument’s 26 and 12-day exponential moving averages. In calculating their values, both moving averages use the closing prices of whatever period is measured on the MACD chart. A 9-period EMA of the MACD itself is also plotted. This line is called the signal line, which acts as a trigger for buy and sell decisions. The MACD is considered the faster line because the points plotted move more than the signal line, which is regarded as the slower line. The MACD histogram is a visual representation of the difference between the MACD and its 9-day EMA. The histogram is positive when the MACD is above its 9-day EMA and negative when the MACD is below its 9-day EMA. The point on the histogram where momentum is zero is the zero line. If prices change rapidly, the histogram bars grow longer. This signals a high level of buying or selling interest among market participants. When the price shows a slow progression, the MACD histogram becomes shorter. In trending market conditions, MACD signals can be quite accurate. However, market trends only occur 20 to 30 percent of the time. When there is a range in the market, which happens 70 to 80 percent of the time, this indicator produces a lot of low-quality signals. That’s why you might want to start looking for different options like the Impulse MACD.

Using Impulse MACD in Technical Analysis

In order to add the Impulse MACD to the chart, navigate to the indicators menu and search for “Impulse MACD” created by LazyBear. Once you’ve installed it on a chart, open its settings and make some changes to the style. Impulse MACD is a modified MACD formed by filtering out the values in a moving average range, thereby reducing the whip so typical in a sideways market. How does that translate into practice? Well, when the price starts moving sideways, the histogram of the indicator and the line become flat. This way, you have full confidence that you should not be opening any trades during this time.

There are many ideas on how you can use Impulse MACD in technical analysis. One strategy involves combining it with volume-based support and resistance zones created by Tommy f1001. This indicator shows multi-time frame key levels of support and resistance based on volume. By using these zones in combination with Impulse MACD, you can produce accurate and early trade entries. For example, the entry conditions for a long trade could involve the market returning to a support zone for a retest, the Impulse MACD turning green, and the price closing above the support zone.

Whether you are a trend trader or a more conservative trader, there are various ways to use Impulse MACD in your trading strategy. By experimenting with different entry and exit conditions, you can create a strategy that works best for your trading style. Feel free to leave a comment with your ideas and suggestions about the Impulse MACD. Thanks for reading!


38 COMMENTS

  4. Thanks for the helpful video, TradeIQ. Could you let us know what the tool was you were using to measure expected profit? It looked like you were drawing a box from the start to the end of the trade on the historical bars, and it gave you figures for the profitability. What was that? Thanks

  5. I just want to trade the large Trends mostly which I'm sure that's what this is targeting. How does this keep up with the ability to know that you're in a trend? Does it check every X seconds to see if the trend is still heading in the desired Direction? Does it check to see if it stalls and decide whether to exit or close the trade or continue to hold? Also can I automate this to trade unattended? I will just be using it on a paper trading account for now to test it out. You mentioned other indicators that seemed need dependency indicators to run with this one. I'm not as versed in this type of macd indicator, but, what indicators are the best ones to run with this impulse macd? I just wanted a typical setup to try for what I'm targeting. Videos kind of hard to see what you did on the screen even on a computer let alone a smartphone.

  12. I think to be in the upper echelon of successful traders like Mr Matej Novak requires an innate skill, a gift. It`s just like being a great violinist. But to be a competent trader and make money is a skill you can learn.

  18. "10X Better Than MACD" – LOL. Well, obviously a made-up exaggeration. 'Creative license' market-speak aside, the point I'm making is not that the ImpulseMACD indicator is necessarily better or worse than the normal MACD, but that when someone makes a claim in a headline with a number attached to it, the author is making a specific, quantifiable claim. If someone is willing to 'stretch the truth' (or outright lie) about that one thing, then what else is being mis-represented?

    I get it though: Headlines are what convinces someone to click on the video link. Sometime after clicking, you will see ads displayed – often immediately after opening the vid. Many of these strategies claiming "Never Loses" or "98 % Win-Rate" are actually not-so-thinly-veiled clickbait strategies FIRST, then trading strategy SECOND. Keep that in mind when perusing the endless miraculous YouTube trading indicator strategies.

    The strategy may be sound. Or not. Or just as good as many others. No indicator or group of indicators alone will be the keys to wealth. If you are new to trading, the best route for you is to learn the basics of supply and demand and all the other basic metrics of trading first. Then back-test each strategy yourself. (The 'back-tests' done on the clickbait vids are often cherry-picked and/or done on just one single security.) Learn risk management. avoid over-complicating your charts. Paper trade, then start slow with real money. Oh, and have fun!

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